American River Bankshares Reports Third Quarter 2013 Results

American River Bankshares Reports Third Quarter 2013 Results 
SACRAMENTO, CA -- (Marketwired) -- 10/17/13 --  American River
Bankshares (NASDAQ: AMRB) today reported net income of $893,000, or
$0.10 per diluted share for the third quarter of 2013 compared to
$780,000, or $0.08 per diluted share for the third quarter of 2012.
For the nine months ended September 30, 2013, net income was $2.2
million or $0.24 per diluted share, compared to $2.3 million or $0.24
per diluted share for the nine months ended September 30, 2012. 
"In the third quarter, American River Bankshares reported growth in
several key indicators, including net income, net interest margin,
deposit and loan balances," said David Taber, President and CEO of
American River Bankshares. "While our growth in these areas was
modest, that growth coupled with the results of our diligence in
expense control, showcases our organization's commitment to continued
success." 
Financial Highlights  


 
--  Net loans totaled $249.7 million at September 30, 2013, up from $247.8
    million at June 30, 2013, and up from $245.5 million at March 31,
    2013.
    
    
--  Other real estate owned ("OREO") declined 54.1% to $5.6 million at
    September 30, 2013, compared to $12.2 million at December 31, 2012,
    and declined 59.1% compared to $13.7 million one year ago.
    
    
--  The allowance for loan and lease losses was $5.6 million (2.18% of
    total loans and leases) at September 30, 2013, compared to $5.8
    million (2.24% of total loans and leases) at December 31, 2012 and
    $5.9 million (2.15% of total loans and leases) one year ago. The
    allowance for loan and lease losses to nonperforming loans and leases
    increased to 114.9% at September 30, 2013, from 105.6% at December 31,
    2012 and 87.6% one year ago.
    
    
--  The Company's subsidiary, American River Bank, remains above the
    well-capitalized regulatory guidelines. At September 30, 2013,
    American River Bank's Leverage ratio was 12.5% compared to 12.6% at
    December 31, 2012 and 12.7% one year ago; the Tier 1 Risk Based
    Capital ratio was 23.2% compared to 23.5% at December 31, 2012 and
    22.4% one year ago; and the Total Risk Based Capital ratio was 24.4%
    compared to 24.8% at December 31, 2012 and 23.6% one year ago.
    
    
--  The third quarter 2013 net interest margin was 3.44%, up from 3.41%
    for the second quarter of 2013 and down from 3.88% for the third
    quarter of 2012.
    
    
--  Shareholders' equity was $89.8 million at September 30, 2013 compared
    to $94.0 million at December 31, 2012 and $93.8 million at September
    30, 2012. Tangible book value was $8.33 per share at December 31, 2012
    compared to $8.31 per share at September 30, 2012 and September 30,
    2013. Book value per share was $10.16 per share at September 30, 2013
    compared to $10.08 per share at December 31, 2012 and $10.06 per share
    from a year ago.

  
Northern California Economic Update, September 30, 2013 
Each quarter, management at American River Bank prepares an industry
and economic report for internal use that analyzes the past six to
eight rolling quarters within the three primary markets in which the
Company does business -- Sacramento, Sonoma and Amador Counties.
Sources of economic and industry information include: Voit Real
Estate Services market reports, Keegan & Coppin Company, Inc., Trulia
Real Estate Search, Foreclosure Radar, the State of California
Economic Development Department, Currency Trading News and the
Sacramento Association of Realtors. In general, the data included in
the report shows economic indicators in these markets trending
upwards through the end of 2011, moving the economy off of its low of
the past few years. After mixed results in the first half of 2012,
trends were positive in the third and fourth quarters. In general,
results in the first three quarters of 2013 show positive trends.
Activity in the residential market was positive throughout the past
year and through three quarters of 2013. Commercial real estate
trends improved in the fourth quarter of 2012 and have continued in
2013. In the third quarter of 2013, unemployment was higher than the
second quarter, but remains lower than year-end 2012. Positive trends
and ongoing tangible signs of sustained growth are required before
management can determine the viability of the economic recovery in
each of these regions. 
Commercial Real Estate. In Sacramento County, office vacancy in the
first half of 2013 was 15.9%, a decrease from 16.2% at year end;
retail vacancy, at 9.0%, is also better than 9.4% at year-end; and at
June 30, 2013, industrial vacancy is 11.7%, down from 11.9% at
year-end 2012 and better than 12.4% at March 31, 2013. Vacancies of
all three property types are the lowest in over two years. In Sonoma
County, after dropping in the second half of 2012, office vacancies
increased in the first half of 2013 but, at 21.0%, are below year-end
and the lowest in over two years; retail vacancies continue to drop
and were 4.8% at September 30, 2013 compared to 5.4% at year end; and
industrial vacancies were 12.3% at year-end 2012 and, at 10.4%, have
dropped steadily through all of 2013. In both Counties, absorption of
commercial real estate continues to show improvement. In Sacramento
County, office, retail and industrial properties have had positive
absorption in each of the past four quarters. In Sonoma County,
office and industrial absorption has been a positive in each of the
past five quarters with total absorption improving; retail absorption
is not measured but with a 4.8% vacancy rate, the retail market
remains strong in the County. In Sacramento County, commercial lease
rates have shown little change in the last two years; office rates
have been in the $1.74/SF to $1.76/SF range for eight consecutive
quarters, retail has ranged from $1.34/SF to $1.40/SF over the same
period, and industrial has ranged from $0.35/SF to $0.37/SF. After
declining for several quarters, data for Sonoma County shows some
improvement; office leases have ranged from a low of $1.31/SF to the
current rate of $1.41/SF, retail leases average $1.62/SF, and
industrial rates, after dropping in the first quarter, increased to
$0.77/SF at the end of June. 
Residential Real Estate. Residential real estate data is focused on
California and the markets we serve, and is easiest measured by
tracking foreclosure activity (number of filings and results of
closed foreclosures), home sales (sales prices and asking prices),
and in sales vs. inventory. Trends in 2012 have continued into 2013
in default activity, with lower Notice of Default and Notice of Sale
filings. Statewide through three quarters of 2013 (annualized), the
numbers of Notice of Default and Notice of Sale filings are less than
half of 2012. Notable is the trend in number of closed foreclosures
that are being purchased by third parties. For property foreclosures
Statewide in 2012, third party bids were 40% of trustee sales;
through the first three quarters of 2013, this percentage was 50%.
For Sacramento County in 2012, third party bids were 29% and this
figure is 54% in the first three quarters of 2013; Sonoma County
increased from 29% to 49%; and Amador County increased from 11% to
15%. Compared to same period one year ago, sales prices for homes
sold in the third quarter of 2013 increased by 32% in Sacramento and
25% in Sonoma County, but dropped 17% in Amador County. Asking prices
in Sacramento and Sonoma have also increased from one year ago, and
are unchanged in Amador County. In the Sacramento region, after five
months of reporting a sales inventory of less than one month,
inventory increased to 42 days at the end of August. This is a not
necessarily negative; compared to 2012 the number of sales is
virtually the same but inventory of homes for sale is 70% higher. In
August 2013, Sacramento reported 1,641 sales compared to 2,178 active
listings; average days on market is also 28 days. 
Although not regional data, US home sales and new home starts are an
indicator of an improving economy. Through August 2013, there were
5.39 million homes sold; on an annualized basis, this is more that
15% ahead of 2012. In 2012, housing starts were 28% higher than 2011
and, through eight months of 2013, they are 15% higher than 2012, at
an annual rate of 891,000.  
Employment. After an increase in unemployment to 11.4% in California
in the second quarter of 2012, the rate dropped steadily to 9.6% at
year-end 2012, unemployment increased to 9.7% during the first
quarter of 2013, dropped to 8.5% in the second quarter and increased
to 8.9% in the third quarter. Job growth is also positive; through
August 2013, the State has added 275,000 jobs, an increase of 1.64%
over year end. At the end of August 2013, unemployment in two of our
regions (Sacramento and Sonoma) is equal to or lower than the
California average and, compared to one year ago, all three of our
markets have improved. At August 31, 2013, the Sacramento
unemployment rate was reported to be 8.9%, Sonoma was reported to be
6.6%, and Amador was reported to be 9.4%. Similar to the State, all
three regions reported higher unemployment the third quarter,
compared to the second quarter, but are all lower than year-end. As
noted, job growth in California has been positive and this trend is
consistent in our markets. Through August 2013, Sacramento job growth
was 10,600 compared to year-end 2012, an increase of 1.69%. Sonoma
County reports similar positive job growth, up 4,300 in 2013, 1.82%
higher than year end. Through 2011, Amador County experienced a
general decline in the number of jobs but this has improved. In 2012,
total jobs grew by 40 (0.28%) and, through August 2013, there are 290
new jobs, an increase of 1.99% compared to year end 2012. 
Asset Quality and Balance Sheet Review 
American River Bankshares' assets totaled $602.2 million at September
30, 2013, compared to $596.4 million at December 31, 2012, and $584.6
million at September 30, 2012.  
Net loans totaled $249.7 million at September 30, 2013, down from
$252.1 million at December 31, 2012 and down from $270.2 million at
September 30, 2012. Nonperforming loans decreased $2.0 million
(29.4%) from $6.8 million at September 30, 2012 to $4.8 million at
September 30, 2013. The loan portfolio at September 30, 2013
included: real estate loans of $220.6 million (86% of the portfolio),
commercial loans of $24.6 million (10% of the portfolio) and other
loans, which consist mainly of leases and consumer loans of $10.3
million (4% of the portfolio). The real estate loan portfolio at
September 30, 2013 includes: owner-occupied commercial real estate
loans of $84.8 million (38% of the real estate portfolio), investor
commercial real estate loans of $97.7 million (44% of the real estate
portfolio), construction and land development loans of $7.9 million
(4% of the real estate portfolio) and other loans, which consists of
residential and multi-family real estate loans of $30.2 million (14%
of the real estate loan portfolio). 
Nonperforming assets ("NPAs") include nonperforming loans and leases
and other real estate owned. Nonperforming loans includes all such
loans and leases that are either placed on nonaccrual status or are
90 days past due as to principal or interest but still accrue
interest because such loans are well-secured and in the process of
collection. NPAs declined to $10.5 million at September 30, 2013 from
$17.7 million at year end 2012 and from $20.5 million at September
30, 2012. The NPAs to total assets ratio stood at 1.74% at the end of
September 2013, down from 2.97% at December 2012 and 3.50% one year
ago. Nonperforming loans decreased $700,000 (12.7%) from $5.5 million
at December 31, 2012. The decrease in nonperforming loans was
predominately the result of loans returning to accrual status from
improved credit quality, charge offs, payoffs, and transfers to other
real estate owned ("OREO").  
At September 30, 2013, the Company had nine OREO properties totaling
$5.6 million. This compares to 20 OREO properties totaling $12.2
million at December 31, 2012 and 23 OREO properties totaling $13.7
million at September 30, 2012. During the third quarter of 2013, the
Company sold six properties for a $115,000 net gain and added a
single property with a net book value of $172,000. The Company
adjusted the balance on a single property, to fair value, that was
obtained in a prior quarter by $10,000 for which updated information
was received in the current quarter. This adjustment went to OREO
expense. Other adjustments were an addition of $133,000 to the OREO
valuation for potential fourth quarter sales that are less than the
current book value. At September 30, 2013, the OREO valuation
allowance was $133,000. This compares to a valuation allowance of
$175,000 at December 31, 2012 and $40,000 at September 30, 2012. 
Loans measured for impairment were $28.7 million at the end of
September 2013, compared to $26.6 million at December 31, 2012, and
$26.0 million a year ago. There was no provision for loan and lease
losses for the third quarter of 2013 compared to a $410,000 provision
for the third quarter of 2012. The Company had net charge-offs of
$113,000 in the third quarter of 2013 compared to $677,000 in the
third quarter of 2012. The Company maintains the allowance for loan
and lease losses at a level believed to be adequate for known and
inherent risks in the portfolio. The methodology incorporates a
variety of risk considerations, both quantitative and qualitative, in
establishing an allowance for loan and lease losses that management
believes is appropriate at each reporting date.  
The Company evaluates nonperforming loans for impairment and assigns
specific reserves when necessary. At September 30, 2013, this
evaluation resulted in specific reserves of $801,000 on nonperforming
loans that were considered impaired compared to $528,000 at December
31, 2012 and $455,000 at September 30, 2012. In addition, there were
12 loans totaling $3.2 million, which are included in the $4.8
million of nonperforming loans and leases, which have been modified
and are considered troubled debt restructures at September 30, 2013.
At September 30, 2012 there were 12 loans totaling $2.5 million,
which had been modified and were considered troubled debt
restructures, which were also included in the nonperforming loan
totals. 
Investment securities, which include stock of the Federal Home Loan
Bank of San Francisco ("FHLB Stock"), totaled $273.2 million at
September 30, 2013, up 15.2% from $237.2 million at December 31, 2012
and up 16.8% from $233.9 million at September 30, 2012. At September
30, 2013, the investment portfolio was comprised of 88%
mortgage-backed securities issued by government sponsored entities,
10% obligations of states and political subdivisions, 1% corporate
bonds and 1% in FHLB Stock. 
At September 30, 2013, total deposits were $490.6 million, compared
to $478.3 million at December 31, 2012 and $466.7 million one year
ago. Core deposits increased 8% to $397.1 million at September 30,
2013 from $367.2 million at September 30, 2012 and 4% from $381.3
million at December 31, 2012. The Company considers all deposits
except time deposits as core deposits. 
At September 30, 2013, noninterest-bearing demand deposits accounted
for 29% of total deposits, interest-bearing demand accounts were 12%,
savings deposits were 11%, money market balances accounted for 29%
and time certificates were 19% of total deposits. At September 30,
2012, noninterest-bearing demand deposits accounted for 29% of total
deposits, interest-bearing demand accounts were 11%, savings deposits
were 11%, money market balances accounted for 28% and time
certificates were 21% of total deposits. 
Shareholders' equity decreased to $89.8 million at September 30, 2013
compared to $94.0 million at December 31, 2012 and $93.8 million at
September 30, 2012. The decrease in equity from December 31, 2012 was
due to a reduction in common stock ($3.8 million), primarily related
to the repurchases made under the 2013 Stock Repurchase Program.
Retained earnings increased $2.2 million as a result of the net
income during the period. Accumulated other comprehensive income
decreased $2.6 million as a result of the decrease in the unrealized
gain on securities due to a recent increase in interest rates. During
the third quarter of 2013, the Company did not repurchase any shares
of its common stock under the 2013 Stock Repurchase Program. Year to
date, the Company has repurchased 505,089 shares of its common stock
at an average price of $7.68 per share.  
Net Interest Income  
Third quarter 2013 net interest income was down 10% to $4.4 million
from $4.9 million in the third quarter of 2012 and for the nine
months ended September 30, 2013, net interest income decreased 13% to
$12.8 million from $14.7 million for the nine months ended September
30, 2012. The net interest margin as a percentage of average earning
assets was 3.44% in the third quarter of 2013, compared to 3.41% in
the second quarter of 2013 and 3.88% in the third quarter of 2012.
For the nine months ended September 30, 2013, the net interest margin
was 3.46% compared to 3.94% for the nine months ended September 30,
2012. Interest income for the third quarter of 2013 decreased 11% to
$4.8 million from $5.3 million for the third quarter of 2012 and for
the nine months ended September 30, 2013, interest income decreased
14% to $14.0 million from $16.2 million for the nine months ended
September 30, 2012. Interest expense for the third quarter of 2013
decreased 23% to $361,000 from $470,000 for the third quarter of 2012
and for the nine months ended September 30, 2013 decreased 21% to
$1.1 million from $1.5 million for the nine months ended September
30, 2012.  
The average tax equivalent yield on earning assets declined from
4.25% in the third quarter of 2012 to 3.71% for the third quarter of
2013 and for the nine months ended September 30, 2013, declined to
3.76% from 4.32% for the nine months ended September 30, 2012. Much
of the decline in yields can be attributed to the overall lower
interest rate environment, a decrease in average loans and an
increase in average balances of lower yielding investment securities.
Although the foregone interest on nonaccrual loans decreased in the
third quarter of 2013 compared to the third quarter of 2012, it
continues to have an impact on the net interest margin. During the
third quarter of 2013, foregone interest income on nonaccrual loans
was approximately $101,000, compared to foregone interest of $129,000
during the third quarter of 2012. The foregone interest had an 8
basis point negative impact on the yield on earning assets during the
third quarter of 2013 compared to a 10 basis point negative impact
during the third quarter of 2012. 
The average balance of earning assets increased 2% from $506.7
million in the third quarter of 2012 to $516.0 million in the third
quarter of 2013 and for the nine months ended September 30, 2013,
decreased 0.6% to $503.8 million from $506.8 million for the nine
months ended September 30, 2012. While the change in average earning
assets was minimal, there continues to be a significant change in the
mix of the assets as principal reductions from loan paydowns were
invested into investment securities. This mix change resulted in a
decrease in loan balances and an increase in lower yielding
investment security balances, and this change contributed to the
decrease in the yield on earning assets mentioned above. 
When compared to the third quarter of 2012, average loan balances
were down 9% to $252.2 million for the third quarter of 2013 and for
the nine months ended September 30, 2013 decreased 12% to $252.1
million. Although the Company has continued to generate new loans,
over the past twelve months the production of new loans has been less
than loan payoffs. Compared to the third quarter of 2012, average
investment securities were up 15% to $262.8 million during the third
quarter of 2013. 
Average deposits increased from $474.8 million during the third
quarter of 2012 to $477.4 million during the third quarter of 2013
and from $469.7 million during the first nine months of 2012 to
$471.9 million during the first nine months of 2013. Average
borrowings decreased from $17.6 million during the third quarter of
2012 to $16.1 million during the third quarter of 2013 and for the
nine months ended September 30, 2013, increased to $17.1 million from
$15.7 million for the nine months ended September 30, 2012.  
Noninterest Income and Expense 
Noninterest income for the third quarter of 2013 was $462,000, down
35% from $712,000 in the third quarter of 2012 and for the nine
months ended September 30, 2013, was down 27% to $1.5 million from
$2.1 million for the nine months ended September 30, 2012. On a
quarter over quarter basis, the decrease in noninterest income was
primarily related to a decrease in income from OREO properties from
$262,000 in the third quarter of 2012 to $79,000 in 2013, a decrease
in service charges on deposit accounts from $173,000 in 2012 to
$140,000 in 2013 and a decrease in merchant income from $141,000 in
2012 to $113,000 in 2013. The decrease in OREO income results from
lower rents received from foreclosed office buildings, as the Company
has been able to sell many of the properties. The decrease in service
charges is primarily related to lower fees collected on checks drawn
on insufficient funds. The merchant income decrease is related to
less volume on existing clients as well as lower growth. On a year
over year basis, the decrease in noninterest income was primarily
related to a decrease in income from OREO properties from $653,000 in
2012 to $242,000 in 2013, a decrease in service charges on deposit
accounts from $563,000 in 2012 to $438,000 in 2013 and a decrease in
gains on sale of securities from $75,000 in 2012 to $19,000 in 2013.
Security gains or losses are dependent upon volume and the market.
The decrease in the nine month period in 2013, was partially offset
by proceeds of a life insurance policy on a former director,
resulting in tax-free income of $118,000 that was recorded during the
first quarter of 2013. 
Noninterest expense decreased 16% to $3.5 million for the third
quarter of 2013 from $4.2 million in the third quarter of 2012 and
for the nine months ended September 30, 2013, was down 10% to $11.2
million from $12.4 million for the nine months ended September 30,
2012. While there were many fluctuations in expense related items
between the third quarter of 2012 and 2013, two areas of note would
be a decrease in OREO related expense from $573,000 in 2012 to
$137,000 in 2013 and a decrease in regulatory assessments from
$157,000 in 2012 to $127,000 in 2013. On a year over year basis, OREO
related expense decreased from $1.4 million in 2012 to $637,000 in
2013 and regulatory assessments decreased from $474,000 in 2012 to
$272,000 in 2013. The primary reason for the decrease in OREO related
expenses is due to the sale of a number of properties, including
office buildings. The decrease in the regulatory assessments relates
to an adjustment to the FDIC accrual based upon an updated analysis
revealing that the accrual should be reduced.  
The fully taxable equivalent efficiency ratio for the third quarter
of 2013 decreased to 71.72% from 73.71% for the third quarter of 2012
and for the nine months ended September 30, 2012, increased to 76.52%
from 71.78% for the nine months ended September 30, 2012.  
Provision for Income Taxes  
Federal and state income taxes for the quarter ended September 30,
2013 increased from $167,000 in the third quarter of 2012 to $429,000
in the third quarter of 2013. For the nine months ended September 30,
2012, the provision for income taxes increased to $834,000 from
$729,000 for the nine months ended September 30, 2012. The lower tax
expense in 2012 resulted from the normal tax benefits such as the
benefits of tax-free income related to municipal bonds and bank owned
life insurance, but also in the third quarter of 2012, the Company
began recognizing the benefits of Enterprise Zone credits on its
State tax return. This was the first time the Company took advantage
of the hiring credit and the sales and use tax credit offered under
the California Enterprise Zone program. In the third quarter of 2012,
the Company realized a significant portion of the credit available
for 2012. 
Earnings Conference Call 
The third quarter earnings conference call will be held Thursday,
October 17, 2013 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
David T. Taber, President and Chief Executive Officer, and Mitchell
A. Derenzo, Executive Vice President and Chief Financial Officer,
both of American River Bankshares, will lead a live presentation and
answer analysts' questions. Shareholders, analysts and other
interested parties are invited to join the call by dialing (888)
517-2513 and entering the Conference ID 8692619#. A recording of the
call will be available approximately twenty-four hours after the
call's completion on http://amrb.podbean.com.  
About American River Bankshares 
American River Bankshares (NASDAQ: AMRB) is the parent company of
American River Bank, a regional bank serving Northern California
since 1983. We give business owners more REACH by offering financial
expertise and exceptional service to complement a full suite of
banking products and services. Our honest approach, commitment to
community and focus on profitability is intended to lead our clients
to greater success. For more information, call (800) 544-0545 or
visit AmericanRiverBank.com. 
Forward-Looking Statements 
Certain statements contained herein are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 and subject to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, that involve risks and uncertainties. Actual results may
differ materially from the results in these forward-looking
statements. Factors that might cause such a difference include, among
other matters, changes in interest rates, economic conditions,
governmental regulation and legislation, credit quality, and
competition affecting the Company's businesses generally; the risk of
natural disasters and future catastrophic events including terrorist
related incidents; and other factors discussed in the Company's
Annual Report on Form 10-K for the year ended December 31, 2012, and
in subsequent reports filed on Form 10-Q and Form 8-K. The Company
does not undertake any obligation to publicly update or revise any of
these forward-looking statements, whether to reflect new information,
future events or otherwise, except as required by law.  


 
                                                                            
                                                                            
                                                                            
                  American River Bankshares                                 
      Condensed Consolidated Balance Sheets (Unaudited)                     
                                                                            
(Dollars in thousands)                                                      
                                                                            
                                 September 30,  December 31,  September 30, 
             ASSETS                   2013          2012           2012     
                                 -------------  ------------  ------------- 
Cash and due from banks          $      35,152  $     55,461  $      28,651 
Interest-bearing deposits in                                                
 banks                                   1,000           750          1,000 
Investment securities                  269,917       233,956        230,646 
Loans & leases:                                                             
  Real estate                          220,593       213,900        229,441 
  Commercial                            24,606        30,811         32,385 
  Lease financing                        1,040         1,509          1,886 
  Other                                  9,299        11,909         12,631 
  Deferred loan and lease                                                   
   origination fees, net                  (241)         (230)          (213)
  Allowance for loan and lease                                              
   losses                               (5,567)       (5,781)        (5,934)
                                 -------------  ------------  ------------- 
Loans and leases, net                  249,730       252,118        270,196 
                                 -------------  ------------  ------------- 
Bank premises and equipment, net         1,581         1,888          2,182 
Goodwill and intangible assets          16,321        16,321         16,354 
Investment in Federal Home Loan                                             
 Bank Stock                              3,248         3,254          3,254 
Other real estate owned, net             5,624        12,237         13,681 
Accrued interest receivable and                                             
 other assets                           19,668        20,404         18,594 
                                 =============  ============  ============= 
                                 $     602,241  $    596,389  $     584,558 
                                 =============  ============  ============= 
                                                                            
   LIABILITIES & SHAREHOLDERS'                                              
             EQUITY                                                         
Noninterest-bearing deposits     $     144,673  $    151,201  $     137,289 
Interest checking                       59,155        50,891         52,254 
Money market                           141,231       127,644        126,445 
Savings                                 52,066        51,539         51,254 
Time deposits                           93,459        96,981         99,483 
                                 -------------  ------------  ------------- 
  Total deposits                       490,584       478,256        466,725 
                                 -------------  ------------  ------------- 
Short-term borrowings                    8,000         2,000          2,000 
Long-term borrowings                     8,000        16,000         16,000 
Accrued interest and other                                                  
 liabilities                             5,886         6,139          5,987 
                                 -------------  ------------  ------------- 
  Total liabilities                    512,470       502,395        490,712 
                                                                            
      SHAREHOLDERS' EQUITY                                                  
Common stock                     $      64,168  $     67,977  $      67,948 
Retained earnings                       23,899        21,732         20,861 
Accumulated other comprehensive                                             
 income                                  1,704         4,285          5,037 
                                 -------------  ------------  ------------- 
  Total shareholders' equity            89,771        93,994         93,846 
                                 -------------  ------------  ------------- 
                                 $     602,241  $    596,389  $     584,558 
                                 =============  ============  ============= 
                                                                            
Ratios:                                                                     
Nonperforming loans and leases                                              
 to total loans and leases                1.90%         2.12%          2.45%
Net chargeoffs to average loans                                             
 and leases (annualized)                  0.22%         0.93%          1.15%
Allowance for loan and lease                                                
 losses to total loans and                                                  
 leases                                   2.18%         2.24%          2.15%
                                                                            
American River Bank Capital                                                 
 Ratios:                                                                    
Leverage Capital Ratio                   12.46%        12.64%         12.69%
Tier 1 Risk-Based Capital Ratio          23.15%        23.54%         22.37%
Total Risk-Based Capital Ratio           24.41%        24.80%         23.62%
                                                                            
American River Bankshares                                                   
 Capital Ratios:                                                            
Leverage Capital Ratio                   12.58%        12.82%         12.70%
Tier 1 Risk-Based Capital Ratio          23.36%        23.87%         22.39%
Total Risk-Based Capital Ratio           24.62%        25.13%         23.65%
                                                                            
                                                                            
                                                                            
                     American River Bankshares                              
      Condensed Consolidated Statements of Income (Unaudited)               
                                                                            
(Dollars in thousands, except per share data)                               
                                                                            
                Third       Third              For the Nine Months          
               Quarter     Quarter      %      Ended September 30,      %   
                2013        2012      Change     2013        2012    Change 
             ----------  ----------  -------  ----------  ---------  ------ 
Interest                                                                    
 income      $    4,757  $    5,334   (10.8)% $   13,959     16,168  (13.7)%
Interest                                                                    
 expense            361         470   (23.2)%      1,143      1,454  (21.4)%
             ----------  ----------           ----------  ---------         
Net interest                                                                
 income           4,396       4,864    (9.6)%     12,816     14,714  (12.9)%
Provision                                                                   
 for loan                                                                   
 and lease                                                                  
 losses               0         410  (100.0)%        200      1,365  (85.3)%
Total                                                                       
 noninterest                                                                
 income             462         712   (35.1)%      1,535      2,099  (26.9)%
Total                                                                       
 noninterest                                                                
 expense          3,536       4,219   (16.2)%     11,150     12,382   (9.9)%
             ----------  ----------           ----------  ---------         
Income                                                                      
 before                                                                     
 provision                                                                  
 for income                                                                 
 taxes            1,322         947     39.6%      3,001      3,066   (2.1)%
Provision                                                                   
 for income                                                                 
 taxes              429         167    156.9%        834        729    14.4%
             ==========  ==========           ==========  =========         
Net income   $      893  $      780     14.5% $    2,167      2,337   (7.3)%
             ==========  ==========           ==========  =========         
                                                                            
Basic                                                                       
 earnings                                                                   
 per share   $     0.10  $     0.08     25.0% $     0.24       0.24       -%
Diluted                                                                     
 earnings                                                                   
 per share   $     0.10  $     0.08     25.0% $     0.24       0.24       -%
Average                                                                     
 diluted                                                                    
 shares                                                                     
 outstanding  8,817,287   9,297,505            8,974,803  9,553,430         
                                                                            
Net interest                                                                
 margin as a                                                                
 percentage                                                                 
 of average                                                                 
 earning                                                                    
 assets            3.44%       3.88%                3.46%      3.94%        
                                                                            
----------------------------------------------------------------------------
Operating                                                                   
 Ratios:                                                                    
  Return on                                                                 
   average                                                                  
   assets          0.60%       0.52%                0.49%      0.53%        
  Return on                                                                 
   average                                                                  
   equity          4.01%       3.34%                3.19%      3.33%        
  Return on                                                                 
   average                                                                  
   tangible                                                                 
   equity          4.92%       4.05%                3.89%      4.04%        
  Efficiency                                                                
   ratio                                                                    
   (fully                                                                   
   taxable                                                                  
   equivalent)    71.72%      73.71%               76.52%     71.78%        
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
                                                                            
                        American River Bankshares                           
         Condensed Consolidated Statements of Income (Unaudited)            
                         Trailing Five Quarters                             
                                                                            
(Dollars in thousands, except per share data)                               
                                                                            
                    Third      Second       First      Fourth       Third   
                   Quarter     Quarter     Quarter     Quarter     Quarter  
                    2013        2013        2013        2012        2012    
                 ----------  ----------  ----------  ----------  ---------- 
Interest income  $    4,757  $    4,551  $    4,651  $    5,131  $    5,334 
Interest expense        361         375         407         440         470 
                 ----------  ----------  ----------  ----------  ---------- 
Net interest                                                                
 income               4,396       4,176       4,244       4,691       4,864 
Provision for                                                               
 loan and lease                                                             
 losses                   0         100         100           0         410 
Total                                                                       
 noninterest                                                                
 income                 462         448         625         675         712 
Total                                                                       
 noninterest                                                                
 expense              3,536       3,612       4,002       4,365       4,219 
                 ----------  ----------  ----------  ----------  ---------- 
Income before                                                               
 provision for                                                              
 income taxes         1,322         912         767       1,001         947 
Provision for                                                               
 income taxes           429         260         145         131         167 
                 ==========  ==========  ==========  ==========  ========== 
Net income       $      893  $      652  $      622  $      870  $      780 
                 ==========  ==========  ==========  ==========  ========== 
                                                                            
Basic earnings                                                              
 per share       $     0.10  $     0.07  $     0.07  $     0.09  $     0.08 
Diluted earnings                                                            
 per share       $     0.10  $     0.07  $     0.07  $     0.09  $     0.08 
                                                                            
Net interest                                                                
 margin as a                                                                
 percentage of                                                              
average earning                                                             
 assets                3.44%       3.41%       3.53%       3.80%       3.88%
                                                                            
Average diluted                                                             
 shares                                                                     
 outstanding      8,817,287   8,898,125   9,220,617   9,307,442   9,297,505 
Shares                                                                      
 outstanding-end                                                            
 of period        8,833,562   8,833,562   9,105,729   9,327,203   9,327,203 
                                                                            
----------------------------------------------------------------------------
Operating Ratios                                                            
 (annualized):                                                              
  Return on                                                                 
   average                                                                  
   assets              0.60%       0.45%       0.43%       0.58%       0.52%
  Return on                                                                 
   average                                                                  
   equity              4.01%       2.87%       2.70%       3.68%       3.34%
  Return on                                                                 
   average                                                                  
   tangible                                                                 
   equity              4.92%       3.50%       3.28%       4.46%       4.05%
  Efficiency                                                                
   ratio (fully                                                             
   taxable                                                                  
   equivalent)        71.72%      76.85%      80.95%      79.71%      73.71%
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
                         American River Bankshares                          
             Analysis of Net Interest Margin on Earning Assets              
                         (Taxable Equivalent Basis)                         
                                                                            
(Dollars in thousands)                                                      
                                                                            
Three months ended                                                          
   September 30,               2013                         2012            
                   ---------------------------  --------------------------- 
                      Avg                 Avg      Avg                 Avg  
      ASSETS        Balance    Interest  Yield   Balance    Interest  Yield 
Loans and leases   $ 252,243  $   3,541   5.57% $ 277,793  $   4,101   5.87%
Taxable investment                                                          
 securities          234,714      1,004   1.70%   198,106      1,007   2.02%
Tax-exempt                                                                  
 investment                                                                 
 securities           28,004        282   4.00%    29,806        304   4.06%
Corporate stock           38          1  10.44%        10          -   0.00%
Interest-bearing                                                            
 deposits in banks     1,000          1   0.40%     1,000          2   0.80%
                   ---------  ---------         ---------  ---------        
  Total earning                                                             
   assets            515,999      4,829   3.71%   506,715      5,414   4.25%
                   ---------  ---------         ---------  ---------        
Cash & due from                                                             
 banks                32,045                       41,054                   
Other assets          45,410                       49,974                   
Allowance for loan                                                          
 & lease losses       (5,735)                      (6,283)                  
                   =========                    =========                   
                   $ 587,719                    $ 591,460                   
                   =========                    =========                   
                                                                            
   LIABILITIES &                                                            
   SHAREHOLDERS'                                                            
      EQUITY                                                                
Interest checking                                                           
 and money market  $ 186,685  $     113   0.24% $ 183,189  $     155   0.34%
Savings               51,726         13   0.10%    51,726         28   0.22%
Time deposits         95,409        160   0.67%   100,202        212   0.84%
Other borrowings      16,103         75   1.85%    17,609         75   1.69%
                   ---------  ---------         ---------  ---------        
  Total interest                                                            
   bearing                                                                  
   liabilities       349,923        361   0.41%   352,726        470   0.53%
                   ---------  ---------         ---------  ---------        
Noninterest                                                                 
 bearing demand                                                             
 deposits            143,607                      139,645                   
Other liabilities      5,864                        6,085                   
                   ---------                    ---------                   
  Total                                                                     
   liabilities       499,394                      498,456                   
  Shareholders'                                                             
   equity             88,325                       93,004                   
                   =========                    =========                   
                   $ 587,719                    $ 591,460                   
                   =========  ========= ======  =========  ========= ====== 
Net interest                                                                
 income & margin              $   4,468   3.44%            $   4,944   3.88%
                              ========= ======             ========= ====== 
                                                                            
Nine months ended                                                           
 September 30,                 2013                         2012            
                   ---------------------------  --------------------------- 
                       Avg                Avg       Avg                Avg  
      ASSETS         Balance   Interest  Yield    Balance   Interest  Yield 
Loans and leases   $ 252,129  $  10,699   5.67% $ 287,552  $  12,655   5.88%
Taxable investment                                                          
 securities          221,724      2,597   1.57%   188,828      2,828   2.00%
Tax-exempt                                                                  
 investment                                                                 
 securities           29,100        870   4.00%    29,390        902   4.10%
Corporate stock           32         12  50.14%         9          4  59.37%
Interest-bearing                                                            
 deposits in banks       864          2   0.31%     1,051          8   1.02%
                   ---------  ---------         ---------  ---------        
  Total earning                                                             
   assets            503,849     14,180   3.76%   506,830     16,397   4.32%
                   ---------  ---------         ---------  ---------        
Cash & due from                                                             
 banks                39,682                       37,360                   
Other assets          48,093                       47,626                   
Allowance for loan                                                          
 & lease losses       (5,857)                      (6,531)                  
                   =========                    =========                   
                   $ 585,767                    $ 585,285                   
                   =========                    =========                   
                                                                            
   LIABILITIES &                                                            
   SHAREHOLDERS'                                                            
      EQUITY                                                                
Interest checking                                                           
 and money market  $ 182,022  $     361   0.27% $ 182,833  $     517   0.38%
Savings               51,124         55   0.14%    50,480         88   0.23%
Time deposits         96,385        502   0.70%   100,010        643   0.86%
Other borrowings      17,084        225   1.76%    15,741        206   1.75%
                   ---------  ---------         ---------  ---------        
  Total interest                                                            
   bearing                                                                  
   liabilities       346,615      1,143   0.44%   349,064      1,454   0.56%
                   ---------  ---------         ---------  ---------        
Noninterest                                                                 
 bearing demand                                                             
 deposits            142,351                      136,354                   
Other liabilities      5,912                        6,230                   
                   ---------                    ---------                   
  Total                                                                     
   liabilities       494,878                      491,648                   
  Shareholders'                                                             
   equity             90,889                       93,637                   
                   =========                    =========                   
                   $ 585,767                    $ 585,285                   
                   =========  ========= ======  =========  ========= ====== 
Net interest                                                                
 income & margin              $  13,037   3.46%            $  14,943   3.94%
                              ========= ======             ========= ====== 

  
Investor Contact:
Mitchell A. Derenzo
Chief Financial Officer
American River Bankshares
(916) 231-6723 
Media Contact:
Diana La Point
Corporate Communications
American River Bankshares
(916) 231-6717 
 
 
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